Treehouse Foods, Inc. v. Green Mountain Coffee Roasters, Inc.

Background

The order concerns the indirect-purchaser actions in multidistrict litigation alleging that Keurig Green Mountain, Inc. engaged in anticompetitive conduct involving K-Cup products. The claims alleged violations of Sections 1 and 2 of the Sherman Act, Section 3 of the Clayton Act, and various state antitrust laws. The court previously dismissed the indirect purchasers’ federal antitrust claims and claims under seven states’ antitrust laws, while allowing claims under the antitrust laws of fourteen states and the District of Columbia to proceed. The parties later engaged in extensive discovery and negotiated a settlement.

The indirect-purchaser plaintiffs and Keurig agreed to a proposed $31 million settlement. The plaintiffs asked the court to preliminarily approve the settlement agreement and release, certify a class for settlement purposes only, appoint class counsel and class representatives, approve the notice plan, and appoint a claims administrator, escrow agent, and special master. Keurig did not oppose the motion.

Court’s Analysis

For preliminary approval, the court evaluated whether the proposed settlement appeared fair, reasonable, and adequate and whether it warranted notice to class members followed by a full fairness hearing. The court found that the agreement appeared to result from months of good-faith, arm’s-length negotiations assisted by former federal judge Joseph J. Farnan Jr. The court also found no obvious deficiencies, determined that the settlement amount appeared reasonable at this preliminary stage, and found that the agreement treated class members roughly equally through a formula based on purchase price and proof of purchase.

The court provisionally certified the proposed settlement class under Federal Rule of Civil Procedure 23. The class covered individuals and entities in the United States and its territories that bought Keurig K-Cup Portion Packs from someone other than Keurig, not for resale, during specified periods. The court found the requirements of numerosity, common questions, typical claims, adequate representation, predominance of common issues, and superiority of a class action were satisfied for settlement purposes only.

Appointments and Notice

The court appointed Kaplan Fox & Kilsheimer LLP, Pearson, Simon & Warshaw, LLP, and Wolf Haldenstein Adler Freeman & Herz LLP as class counsel; the plaintiffs as class representatives; JND Legal Administration as claims administrator; Signature Bank N.A. as escrow agent; and Judge Farnan as special master. The special master was appointed to make recommendations concerning the settlement, notice, and allocation program.

The court approved the proposed notice plan as the best notice practicable under the circumstances and found that it satisfied due-process requirements and the elements required by Rule 23(c)(2)(B). The plan involved digital advertising, a print advertisement in People Magazine, and a national press release, with an estimated reach of about 70% of class members over an eight-week campaign.

Disposition

Judge Vernon S. Broderick granted the plaintiffs’ unopposed motion. The order required Keurig to provide class information to the claims administrator within 15 days, required the administrator to mail notices within 15 days after receiving that information, and gave Rule 23 class members 60 days from mailing to opt out or object. The court set a final fairness hearing for June 4, 2021, and stated that a final order and judgment would issue if the court later granted final approval. The order did not itself grant final approval of the settlement.